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Human Relations
[0018-7267(200107)54:7]
Volume 54(7): 811–817: 017835
Copyright © 2001
The Tavistock Institute ®
SAGE Publications
London, Thousand Oaks CA,
New Delhi

Introduction: Knowledge management

in professional service firms
Laura Empson

Knowledge represents a highly valuable organizational resource. Organiz-

ations should pay careful attention to how they manage knowledge. Pro-
fessional service firms (PSFs) have much to teach other organizations about
knowledge management. In the course of the 1990s these assertions pro-
gressed from being novel ideas to becoming well-worn clichés. Learned aca-
demic journals and airport bookshelves are now crowded with works which
seek to define the nature of knowledge and identify how it can be managed.
Librarians and IT support staff, traditionally marginalized within organiz-
ations, have found themselves re-branded as ‘key information resources’ and
‘chief knowledge officers’. Accountants and consulting firms, typically rele-
gated to a professional services ghetto within the management literature,
have been thrust into the foreground as exemplars of best practice in the field
of knowledge management.
Such is the interest in the topic of knowledge management that a back-
lash is almost certainly imminent. Bertels and Savage (1998) have suggested
that ‘after three years of intense fluff, the lemmings will be on to their next
topic, without ever having really mined the subject of knowledge’ (p. 7). This
special issue of Human Relations seeks to make a lasting contribution to our
understanding of the role of knowledge within organizations. It brings
together researchers from a variety of disciplinary and theoretical perspec-
tives who are united by their common interest in the management of know-
ledge within PSFs.
Why has knowledge management become such a ‘hot’ topic in recent
years? Some might argue that it is the result of effective marketing by con-
sulting firms (see Suddaby and Greenwood in this issue). Others suggest
that academics are inherently attracted to ideationalist theories because, as

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812 Human Relations 54(7)

intellectuals, this is where their competences lie (see Donaldson in this

issue). But neither argument can explain why knowledge management has
become the focus of attention at this time, rather than in earlier decades.
At a practical level, the current emphasis on knowledge management
can be attributed to two distinct yet inter-related developments. First, capital
and labour-intensive industries have continued to decline within developed
economies and the relative importance of information-intensive industries
has increased. Second, rapid advances in information technology have
created incentives for identifying sources of knowledge within organizations
and for developing systematic procedures for disseminating knowledge more
widely among organizational members.
At a theoretical level, two concurrent developments have contributed
to the increased emphasis on knowledge within the management literature.
At around the same time that the resource-based view of the firm identified
knowledge as the primary source of sustainable competitive advantage, post-
modern perspectives on organizations began to challenge fundamental
assumptions about the nature and meaning of knowledge within organiz-
ations and society as a whole. These alternative perspectives have taken their
place in a complex and long-standing debate about the role and nature of
knowledge in organizations.
Any attempt to impose a structure on this debate, or to develop a typol-
ogy for classifying this research, represents the kind of reductivist thinking
so deplored by post-modern writers on knowledge in organizations. Cer-
tainly many researchers operate across disciplinary, epistemological and
paradigmatic boundaries (e.g. Amit & Schoemaker, 1993; Kogut & Zander,
1992; Spender, 1996). Nevertheless, two broad alternative perspectives on
knowledge in organizations have emerged (see Table 1). Most writers in this
field tend either to view ‘knowledge as an asset’ or to think in terms of
‘knowing as a process’.
Research which adopts the ‘knowledge as an asset’ perspective seeks to
identify valuable knowledge within organizations and to develop mechanisms
for managing it effectively. Economists have long recognized that organiz-
ational knowledge represents an important source of competitive advantage
(Nelson & Winter, 1982; Penrose, 1959; Teece, 1981). In recent years
resource-based theorists have conceptualized organizations as mechanisms for
creating and utilizing knowledge (Barney, 1991; Conner & Prahalad, 1996;
Grant, 1996). In this context knowledge is often viewed as an objectively
definable commodity, with exchanges of knowledge between individuals being
governed by the functioning of an internal market (Davenport & Prusak,
1998; Szulanski, 1996; Teece, 1998). The literature on knowledge manage-
ment abounds with references to organizations transferring knowledge
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Empson Introduction 813

Table 1 Alternative perspectives on knowledge in organizations

Knowledge as an asset Knowing as a process

Purpose of research Normative. Descriptive.

To identify valuable knowledge and
to develop effective mechanisms
for managing that knowledge within
organizations.
Disciplinary foundations Economics
To understand how knowledge
is created, articulated,
disseminated, and legitimated
within organizations.
Sociology

Underlying paradigm Functionalist Interpretive

Epistemological Knowledge as an objectively Knowledge as a social
assumptions definable commodity. construct.

Models of knowledge Exchanges of knowledge among Knowledge is disseminated and

transmission individuals are governed by an
implicit internal market within
organizations.
Main levels of analysis Organization and its knowledge
base.
legitimated within organizations
through an ongoing process of
interaction among individuals.
Individual in social context.

capabilities, renewing knowledge bases, and measuring knowledge assets (e.g.

Hansen et al., 1999; Huseman & Goodman, 1999; Scott, 1998). Consistent
with the economic foundations of this perspective, much of the writing in this
field reflects the functionalist paradigm and adopts the firm as a unit of analy-
sis, or more specifically the knowledge base and the knowledge management
systems of the firm.
By contrast, researchers who adopt the ‘knowing as a process’ per-
spective argue that knowledge cannot be analysed and understood as an
objective reality. Instead knowledge is viewed as a social construct, devel-
oped, transmitted and maintained in social situations (Berger & Luckmann,
1967; Blackler, 1995; Tsoukas, 1996). In this context, alternative concepts
of legitimate knowledge can co-exist within organizations and individuals
seek to establish their claims to legitimacy by demonstrating the pre-
eminence of their expertise (Alvesson, 1995; Morgan, 1986; von Krogh &
Roos, 1996). The objective of this school of research is to understand how
knowledge is created, articulated, disseminated and legitimated within organiz-
ations. Rather than consider explicit models of knowledge transmission, this
perspective emphasizes the process of interaction between individuals and the
role this plays in the creation, legitimation and dissemination of knowledge on
an ongoing basis (Brown & Duguid, 1991; Latour, 1987; Pentland, 1992). The
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814 Human Relations 54(7)

disciplinary foundations of this perspective lie broadly within sociology and the
underlying paradigm is interpretive. The primary unit of analysis is the indi-
vidual operating within his or her social and organizational context.
The ‘knowledge as an asset’ and ‘knowing as a process’ perspectives
are both concerned with understanding knowledge in all forms of organiz-
ational contexts. In parallel with these literatures, a separate and substantial
literature on the professions and PSFs has developed which yields generaliz-
able insights into knowledge in organizations as a whole. Within PSFs the
centrality of knowledge has long been recognized, both as an input and an
output. Key knowledge holders have been highly valued and rewarded. Pro-
tracted apprenticeship models have developed for transferring tacit know-
ledge from experienced to junior staff. Training and examination in a
formalized body of knowledge are a condition of entry into the accredited
professions, such as accounting and law.
This special issue of Human Relations explores the theme of knowledge
management in the context of the established professions in particular and
knowledge-intensive firms in general. The category of knowledge-intensive
firm includes organizations which are primarily concerned with the appli-
cation of specialist technical knowledge to the creation of customized
solutions to clients’ problems. It is hoped that, by rooting the study of know-
ledge management in the context of a well-established literature on pro-
fessionals and PSFs, substantive and sustainable insights can be developed.
In the first article of this special issue, Morris presents an in-depth case
study of a knowledge codification project undertaken within a consulting
firm. He argues that the codification process represents the PSF’s assertion of
‘property rights’ over the knowledge of the individual professional. He asks
why professionals are willing to cooperate with this process and suggests it
is because they understand the limits of codification. Professionals perceive
that their true value to their clients (and their source of power within their
PSF) derives from their unique combination of experiences and intuition.
They recognize that this knowledge is not susceptible to codification.
My article also considers the process by which professionals share, or
refuse to share, their knowledge with colleagues. I ask why individuals resist
knowledge transfer in the context of mergers between PSFs and find that
impediments to knowledge transfer will be greatest when individuals perceive
there to be fundamental differences in the form of the knowledge bases and
the organizational images of the combining firms. In this context individuals
experience the twin fears of ‘exploitation’ and ‘contamination’, which derive
from a complex combination of organizational and individual, commercial
and personal, and objective and subjective factors.
Alvesson also explores the interaction of the commercial and personal
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Empson Introduction 815

realms in PSFs and the process by which these factors shape the way in which
knowledge is conceptualized and legitimated. Adopting a sceptical view on
the functionalist understanding of the nature and significance of knowledge
in knowledge-intensive firms, he examines the relationship between the image
of the organization and the identity of the individual. He demonstrates how
the interactions of image and identity can exert control over the behaviour
of individuals in knowledge-intensive firms.
Whereas Alvesson explores the ambiguity-intensive nature of much
knowledge work, Willman et al. focus on a form of knowledge work with
highly tangible outputs which is governed by an extensive body of codified
knowledge. Their empirical study of trading activities in investment banks
shows how traders utilize the generally understood models of finance theory
to predict how the market will work, but rely upon personal experience and
intuition to determine how to ‘work the market’. Traders can only out-
perform the market when they do not obey the strictures of established
finance theory. In this context, traders will resist attempts to codify and dis-
seminate their knowledge as it will cease to have value once it becomes widely
recognized as legitimate.
In Willman et al.’s study, knowledge is developed by individuals in
interaction with their colleagues and competitors. Lowendahl et al. introduce
an additional dimension to the knowledge creation process: the client. Adopt-
ing a resource-based perspective, they explore the interaction between the
knowledge base and client base PSFs and demonstrate how these two factors
can either extend or constrain each other. They emphasize that processes of
knowledge development and dissemination cannot be studied simply at the
individual and organizational level but must also be understood in the
context of a PSF’s strategic positioning with regard to its clients and poten-
tial clients.
Suddaby and Greenwood introduce yet another dimension to the dis-
cussion by providing a field-level analysis of the process by which manage-
ment knowledge is produced and consumed within society. They explore two
dynamics: the ‘commodification’ of management knowledge (i.e. the ten-
dency of large consulting firms to reduce knowledge to a routinized and
codified product) and the ‘colonization’ of professional fields (i.e. the ten-
dency of Big Five PSFs to extend commodified managerial knowledge into
adjacent professional jurisdictions). They explicate the complex interactions
of communities of organizational actors involved in the production and con-
sumption of management knowledge and, in so doing, question the current
emphasis of much management literature on knowledge as an objectified
property.
In his concluding comments to the special issue, Donaldson reviews
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816 Human Relations 54(7)

current trends in research on knowledge and knowledge-intensive firms and

sounds a note of caution. He counsels against the adoption of overly ideation-
alist theories, arguing that such theories overlook the extent to which know-
ledge management initiatives are leading to the increasing bureaucratization
and rationalization of knowledge in organizations. At the same time, he
recognizes the need to challenge rationalized and positivist models of know-
ledge creation, storage and transmission. He emphasizes the need to persist
with a sceptical inquiring attitude and careful empirical analysis which will
stand the test of time long after the current wave of interest in knowledge
management has passed.

Acknowledgements

I would like to thank Ray Loveridge and the large team of reviewers for their
valuable inputs into this special issue. I would also like to thank Tamar Jeffers
for all her help throughout the process.

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